Tags
inflation-adjusted wages, manufacturing, manufacturing wages, private sector wages, wages, {What's Left of) Our Economy
Could anything be more revealing about the recent situation with America’s manufacturing wages than this development? Adjusted for inflation, industry’s wages were flat on a year-on-year basis. And that was their best such performance since July, 2017, when they rose by 0.65 percent over July, 2016’s levels.
Not that the news reported last Friday by the Bureau of Labor Statistics (BLS) was all bad for manufacturing workers. In December, their real wages increased by 0.28 percent on month – a pretty good performance by recent standards. Yet even that improvement represented a slowdown over the November sequential advance of 0.37 percent. (Both these monthly numbers are still preliminary.)
Moreover, not even the welcome advances of these last two data months was enough to lift manufacturing out of a long real wage recession. Price-adjusted hourly pay for its employees is still down a cumulative 0.28 percent since March, 2016.
In addition, the December data still left manufacturing a serious real wage laggard when compared with the private sector economy as a whole. (BLS doesn’t include government workers’ wages in these reports, since their wages are set by politicians’ decisions, not market forces, and therefore say almost nothing about the fundamentals of the U.S. labor market.)
Month-on-month, inflation-adjusted private sector wages advanced by 0.46 percent – their biggest such increase since the 1.05 percent spurt of January, 2015, and a much bigger increase than in after-inflation manufacturing wages.
On an annual basis, constant dollar private sector wages in December were up 1.12 percent – the strongest such rise since September, 2016’s 1.13 percent and, again, a much larger improvement than for real manufacturing wages.
And adding insult to injury, the gap between inflation-adjusted wages in manufacturing and in the private sector overall keeps widening. From the beginning of the current economic recovery (June, 2009) to last month, after-inflation private sector wages were up 7.24 times more (5.43 percent) than price-adjusted manufacturing wages (0.75 percent). As of the previous December, the gap was 5.69-to-one, as real private sector wages had risen by 4.27 percent, and real manufacturing wages had improved by the same 0.75 percent.
RealityChek 